1. The Rise of Big Business: The Failure of Trusts and Cartels – Murray N Rothbard

20th Century American Economic History

1. The Rise of Big Business: The Failure of Trusts and Cartels

Lecture by Murray N. Rothbard

In the 19th Century and the beginning of the 20th, the rise of big business on the free market could not create monopolies and cartels. Only government could do that. Government tried. Government failed.

1 of 8 from Murray Rothbard’s 20th Century American Economic History lecture series.

00:00
hello singing for the next line I really
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don’t know I must apologize I’m very
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poor at estimating how long and he give
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them set up stuff is gonna take me to
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this I don’t know if I’m gonna finish
00:09
this is one make sure to but anyway the
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theme for the next block of stuff is big
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as the rise of big business in the
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familiar of trust and cartels covering
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essentially especially the century in
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the late 19th century in the early the
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reference here basic references lead the
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theme of Orthodox historiography so to
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speak of almost a lot of stories up
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until a few years ago that the rise of
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the state regulation federal regulation
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of progressive period essentially comes
00:43
about because we have the rise of big
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business in late 19th century of
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large-scale industry big business became
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an OP allistic closed and because of the
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the evils of monopolies were then
00:53
preceded my arising group of workers
00:56
farmers and and the reformer delectables
00:59
and these guys got together and then
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corrected these evils for the great
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measures of the progressive period
01:06
there’s a new freedom new era of a new
01:08
world new nationalism who feel fair any
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other great society if I was ever these
01:14
are essentially programs to reform big
01:18
business big business monopolies which
01:20
arose in the free market so the in my
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view the rigid doing but the the story
01:28
in almost exactly the opposite other
01:30
words that what happened with the rise
01:32
of big business in large-scale industry
01:33
was a truly progressive it was more
01:36
peace sense for industrial progress and
01:41
the living productivity etc on the free
01:44
market many made big business at risk
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what I’d like to achieve monopolies
01:49
carton through cartels and trust that
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they’re on the free market these things
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were launched in many areas but they
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almost all have failed right miserably
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because of the wings of competition and
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then having seen if these things fail at
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various big business interest turn to
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the state apparatus to do the carnal
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izing work for them between the
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monopolizing work for them which they
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could not achieve in the feet more
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so then the basic interpretation of a
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recipe the new nationalism mundial
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cetera et cetera
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smoked them all together obviously
02:22
simplifying fashion amazing
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interpretation that becomes of these and
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the essences these movements are the
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attorney to the state apparatus to
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perform the monopolizing function but
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could not be achieved on the free market
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and to do this requires a certain amount
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of flim-flammery for especially this
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morning about illusions of the opium of
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the people I might differ whether on
02:48
whether so beam is necessary or not any
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rate it’s certainly necessary to achieve
02:52
the goals of the people wanted to
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achieve if you want to turn with a free
02:56
market to arrive a monopolization car
02:59
Hawaiian nation if you want internal
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government to do this one of the things
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you have to do is to realize of course
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at end of the mock receipt you know in a
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country we’re voting forces endemic you
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can’t tell the public can tell the
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public oh we have to have the ICC and
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the FTC and cetera so there’s insurance
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regulation blah blah blah infinity
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because anyone monopolize and we went on
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a strict production and raise prices and
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allocate say all that this would go over
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very vaguely American public so the
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great the great show game of our century
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was accomplished
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basically telling the public and we’re
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doing this in the name of combating
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monopolies I was a man of antitrust and
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maybe restricting business this car
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motivation was accomplished so we have a
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great paradox of monopolies from
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monopolization in the name of anti
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monopolization
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this of course comes with south soluble
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the Republican of those great great
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traditions though Beatrix certain
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segments of anti-monopoly rhetoric
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ideology and part of the public so easy
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just to sell this kind of I’m basically
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to do that however he needed of course
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that will lead and Wyatt’s the alliance
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with in up with an intellectual so much
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more afford just successfully soulless
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great congee a great shot in the
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American public we neither
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carta lysing interests needed a cadre of
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intellectuals of approach Elizabeth
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well nothing more remarkable to be and
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they had it in the fall of the
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progressive and elections I view the
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social work the social workers the
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economists the sociologists social
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scientists
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supplement housework as a separate
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seconds whole cadre of professional
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intellectuals which arose during late
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nineteenth century and by the early 20th
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of Erichs reason is retarted envelop
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were running and willing to perform this
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kind of feature alliance they also need
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it in this in this partnership the
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spotter support statism they also needed
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to bring out of existence group of labor
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unions i don’t feel too much with us in
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electrical some extent industrial
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unionism not come industrial the law
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carrier arises and since the group of
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industrial boy forties and the
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caramelizing interest something they
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also needed at this upland labor force
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will be willing to go along with us and
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take a junior partnership role in this
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great tripartite alliance and this
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moment what was found on the from the
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form of the American Federation labor
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Samuel Gompers on greedy
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so the embodiment of a court responsible
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in code unionism so we begin to forge
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then an impressive period solidified
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during World War one
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continuing on really over sets of
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various forms we in the voiceless I call
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a Triple Alliance
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later on between for various groups of
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big business interests
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progressive intellectuals and laboring
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in responsible labor unions these
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formally the great center of American
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life before the matrix or the consensus
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and of course all sorts of differences
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related differences of emphasis I think
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this forms this really starting a
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progressive period really forms the the
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matrix for American life from men are up
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at all the presents I think the
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important lesson for ourselves right now
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that we’re still living under this kind
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of
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Alliance we see in the progressive
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period the emergence of a current system
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the seeds were trying out culmination of
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the present system this Triple Alliance
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the the intellectuals get out of the
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Triple Alliance I will deal with them
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later on is essentially power press the
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Asian and the power out of the system
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they get the good thing cookie jobs and
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they and the establishment both are they
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get something else I also point out I
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want to anticipate later on what’s your
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six of us they also get they have a
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feeling mr. eyes in this period which
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comes which hits them way more the
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addition of a power improper they have
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the ideological feeling the lays a fair
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capitalism is outmoded one reason or
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another it’s its owns only fit for Aryan
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system whatever a small business they
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don’t like Marxian socialism but this –
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it’s too pathetic trouble oriented –
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proletarian so they rather looking for
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the Third Way a little way a third way
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or whatever which will which will
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harmonize all classes under the great
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aegis of the federal government or the
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central government with the Triple
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Alliance with them the big business and
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responsible unionism in power I say that
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be different emphases
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I mean they figure they find the system
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in this new this new system of where we
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want to call it where many many names
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for in corporate sleaze my favorites
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and they find this as very cozy Alliance
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which will harmonize all classes or to
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bring the public together everybody will
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find its place in the great I’m a great
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great sort of stylist system it’s not
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course unique to the United States or
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something else I’m really anticipating
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again again right it’s not unique the
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United place is also going on in Western
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Europe Germany Italy and France and
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Britain in various degrees search for
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the new system a new system of the mixed
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economy or whether you want state
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monopoly capitalism really want to call
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and the search takes different forms in
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the country
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they were down back and forth for the
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fluency each other I’m all right
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reaches probably its first to low up
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peacetime form in Mussolini’s Italy
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corporate public state or economic
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fascism okay so what am I trying to work
09:07
on now the first step in this analysis
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is arise a big person doesn’t point out
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just give a few example a via seen us
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it’s not gonna be a comprehensive
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history ok example arise a big done
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that’s how big business arose on the
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market performing out the rest of an
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even heroic role versus a small p and
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then how they try to achieve trusts and
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Caracalla valley all flop so that’s
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going to be sort of the theme of the
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first before we get to the progressive
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period you know set the stage for
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incidentally this is just a one little
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note that’s on the site thanks on
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anecdote
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very little revisionist workers that
09:45
done about the art of the antitrust war
09:47
the original media Sherman Act the only
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thing I could say about well just two
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small points one is it was putting on
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Republicans course commander a high
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tower height I’ve have known that for
10:02
the number crafts of the days and other
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ladies I hear typing wait I believe in
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archives the mother of trusts you can’t
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really have a fairly successful trust
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them and industry without a high talent
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to keep out foreign competition and
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Republicans being committed behind has a
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show they were really just as anti
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monopolistic as a Democrat so they put
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through the show number two is the kind
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of cute little story I know I really
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following this lead senator Sherman was
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running for trying to run for the
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presidency II somebody’s gonna get the
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Republican nomination even parently
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shafting parsing by the work of the
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second general Russell how jurors ahead
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of the diamond match company and
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apparently I’ll repay you off some of
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the Sherman delegates this is the charge
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bribed them
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pieces of silver ones over and I’ve got
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them to shift away to somebody out
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anyway of course that this thanks
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Sherman loses out and when the Sherman
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Martin when when President Harrison
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signed the Sherman Antitrust Act he’s
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reported was set of one of the days
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General Sherman just sticks I mean
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shipments Cooper Sherman just likes
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jumped in German in other words
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interpreting the Sherman Antitrust Act
11:20
essentially a bitter we’re sort of
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engines kind of playing against general
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knowledge and I’m in mash copper you
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didn’t expect that they will be one of
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the first companies on the grid law
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office forever yeah you anyway the
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Sherman Act wasn’t really used very much
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you tell them later for after 1900 so
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some important our story this point uh
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was a to sort of economic interpretation
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ok the heroic rise of big business on
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the market um I sort of blush a little
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bit here to say that I’m by actually I’m
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starting off the electric industry by
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crying I know of course infinitely less
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about it Forrest McDonald so I’m just
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gonna revert my money I’m this is the
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main point I one of the stress here is
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that as a mention of why the forest I’ll
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mention this morning that is major
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address wasn’t there was in
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profitability means his homeland bankers
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who trust of his invention as murder of
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invention was motivated by profit the
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only really interested in problem which
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he directed his energy so that phase of
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electricity that phase of most have the
12:35
most profitable opportunity and he was
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mo always driving as major interest as a
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minimum cost are apparently and here
12:43
again for someone more by the side they
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were apparently many of the other
12:47
inventors that for example he is trying
12:49
to invent a light bulb
12:50
serviceable light bulb family extremely
12:53
difficult and he saw that you have to
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have be the first person seen you have
12:57
to have a higher resistance and the wire
12:59
in order to cut down but the course of a
13:01
copper wire it’s probably one of the
13:02
major items of course apparently all the
13:05
other inventors who were so competing
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with them that’s like maximum Swan and
13:08
these people
13:10
we concentrating on a lamp on low
13:14
resistance which apparently would be
13:15
more durable and presumably are doing
13:18
this prosthetic fit more than they’re
13:23
not you know where it’s Edison was it
13:25
crystal but and the other hand would be
13:26
too expensive for the array load really
13:28
practical and so that wasn’t nearly so
13:30
you have to have this time to work on
13:31
the idea of a high resistance and he did
13:38
this troll at each electric lighting
13:40
over other possible areas as I mentioned
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because he thought this we have to be
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the highest elected office to be reaped
13:46
and unlike with lighting he chose to
13:49
work on incandescent lights over arc
13:50
lights because he he figured this would
13:53
be the higher profitability they started
13:57
off by saying the price of the electric
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like I’ve got to be at least as low as
14:01
the price of gas light it can’t be any
14:02
higher excuse even think in terms of a
14:04
higher cost and then the first one they
14:07
were thinking these terms in electric
14:08
business person a person alive each for
14:14
of course each of you gentlemen cause
14:15
they see how to minimize that particular
14:16
that particular element he works on
14:21
highly efficient dynamo in order to cut
14:24
cost as much of the phone and same way
14:27
of the transmission network so any
14:31
develops feeder networks again on this
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whole face of the whole with his whole
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motivation was Tory lowering cost
14:35
thereby increasing profits
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1883 be develops the three wire system
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which saved but presently cuts
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he’s also two feeders system some
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network feeder system which cuts the
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coil of copper by 85 percent reserve
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enormous
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it was incredible cost was cut then in
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1883 works with three what works out a
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three wire system which cross the fourth
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the copper another 63 percent those
15:01
other were Les Mis reduce the course of
15:02
copper pearl lamp from twenty five
15:05
dollars of pearl lamp a dollar fifty
15:07
just a few years ton the native owns the
15:10
meter all concept of a meter in order
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got people now so the guy when they
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either make them pay as they’re using
15:16
the electricity brilliant and purely you
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know profit oriented kind of thinking
15:23
and again which of course gives the
15:25
consumer the incentive to economize of
15:26
the people of the rest of them thank so
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he he develops the team for our list
15:40
places he develops several stations
15:42
lighting and generators and electric
15:45
lights and more rest of it one of the
15:48
things about our son is the typical
15:50
creative geniuses insisted on running
15:51
everything himself apparently every
15:53
aspect of the business it’s a protocol
15:56
comes a weakness finally because you’re
15:57
no delegate authority or interest in any
16:03
aspect I keep your finger in every pie
16:07
first he firmly comes a cropper in a and
16:11
the creating the creativity and of
16:14
things refusing to consider the idea and
16:17
an alternating current the he in case
16:20
another independent creative or knows
16:24
tight to Westinghouse what comes up with
16:27
a alternating current generator even
16:31
more efficient and less costly than
16:32
support so on interestingly enough I
16:36
think hey you had to have 180 car in
16:38
order to have any kind of any kind of a
16:40
plasma on the counter very hard done
16:43
density area and the both of these
16:46
knives extremely independent both cases
16:50
I think they were told by all the big
16:52
shots and experts of the day all the
16:53
scientists and engineers and
16:54
mathematicians that can’t work couldn’t
16:56
possibly work can’t get this the reason
16:58
mathematical proofs I think we can’t
17:00
work it’s like no matter how opposed to
17:02
come yet couldn’t get a plane off the
17:03
ground in both cases they ignore these
17:06
the experts I both cases the male on
17:08
mistakes us that’s the thing they will
17:10
go up on cookie tangents molesting has
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never spent a large portion of later
17:15
years of the life on point of an
17:17
atmospheric engine generate power out of
17:19
the atmosphere so I’m like a
17:20
science-fiction kind of course wasn’t
17:24
successful
17:24
so only takes are there they’re willing
17:26
to you know let me go crash out and go
17:28
out of the frontiers
17:31
last thing has the for us refuses to go
17:33
along with a great the attempt to have a
17:34
trust than you like
17:35
industries of the formation of General
17:37
Electric inspired by JP Morgan a little
17:41
grain Inspiral trust if used to go along
17:44
the thing is going when he continues
17:45
independent Westinghouse a company anger
17:49
the establishment no they stop war a
17:51
stock market with the Morgans and women
17:53
and generally plays extremely heroic
17:56
drove both medicine & Westing has to be
18:00
exemplary non robber baron Westinghouse
18:17
pulled up his company mama waiting and
18:18
being outside with Morgan Anthony builds
18:20
up this company Mars a family and his
18:21
own funds and funds of his friends
18:24
[Music]
18:28
can we get a fellas quick survey of the
18:33
electric industry we get to force the
18:35
famous example of so-called so-called
18:37
evil robber baron time monopoly which is
18:39
the Standard Oil and Tony Rockefeller
18:42
and many of these cases by the way you
18:44
have a sort of the so-called Horatio
18:46
Alger model have worked in one of these
18:47
cases they use these big businessmen
18:50
stored very poor they started grocers or
18:52
something like that it was wrong as
18:53
Rockefeller did and they weren’t
18:56
themselves ups truly from scratch than
18:57
any kind of establishment help
19:01
Rockefeller starts and Cleveland was a
19:05
poor bookkeeper and low income
19:07
bookkeeper and has a commission grocer
19:10
he gets funds he he saves that money in
19:13
the classic pattern he borrows money
19:16
from his father and relatives and
19:17
friends and associates and he founds
19:19
Rockefeller Andrews and Flagler company
19:22
in 1867 coming – well refining shortly
19:25
after and he continues to work on making
19:33
it those as more and more efficient he
19:34
has there being a Cleveland he’s
19:36
centrally located up the Lake Erie route
19:39
were near the source of oil and Western
19:43
Pennsylvania’s he’s got this and Eastern
19:45
Ohio and so people becomes you and late
19:48
placed us to found the world a little
19:50
refineries in that period 1970s he sets
19:56
up an oil company of a pile corporation
20:05
well while he does smile this is being
20:08
done while sets himself up and very
20:11
quickly is the the largest oil refinery
20:16
the price of kerosene person listed in
20:18
this period the the major use of oil was
20:21
not course gasoline which only comes on
20:22
later in or from the automobile the
20:24
kerosene which was used with the
20:25
illuminant from lighting and so forth
20:28
and during this period while he’s
20:32
developing Morocco is developing Merlin
20:35
largest oil refinery the price of
20:37
kerosene goes down plummets with
20:39
competition with expansion of the market
20:41
expansion of production deployments the
20:43
wholesale price of kerosene forever 1963
20:45
was once the 45 cents again one and a
20:49
fairly short period of time a few in a
20:51
decade or so close then about six cents
20:53
a gallon
20:55
the we have a patent lowering of the
20:58
prices per se during the so-called
21:00
building up and so-called monopolies
21:01
it’s a peculiar thing and he cannot mix
21:04
we foes economist or bitterly opposed to
21:07
monopolies the usual argument against
21:08
monopolies is that the gruffly restricts
21:09
production and raises prices because a
21:11
lot of other thing to attack so-called
21:14
monopoly where they leave was although
21:15
the whole thing is a custom increase in
21:17
production constant lower in price which
21:20
is what usually happens in the period
21:24
Andrew Carnegie again again with
21:26
Pittsburgh very near for us lately but
21:29
it makes the old city corny thoughts off
21:31
of a poor Scottish immigrant gets money
21:35
from friends and associates stays up
21:37
some money develops involves steel
21:40
business and to trying back up profits
21:42
in again the old sort of classic model
21:45
and I’ll get back to get back to work
21:51
Rockefeller one of the charges is of
21:55
course one of the famous charges of
21:56
classic textbook margins the reason why
21:58
RocketBallz was able to build up
21:59
standing with an anomaly because he got
22:00
rebates me
22:01
it’s secret rebates are one of the
22:06
problems with that is almost everybody
22:08
got read back to nothing maybe based is
22:10
sort of like a general thing you know
22:12
with every every shipper in almost every
22:14
field got rebates and a rebase with a
22:16
method by which the railroad is course
22:17
competed amongst themselves in other
22:21
words cutting prices from this from list
22:24
especially a method of the list price is
22:27
tools of which over whatever it is for
22:29
widgets and he promised Carlisle if you
22:32
give them you know if you work 200 200 I
22:34
give it even buck and a half this is
22:36
sort of them the ordinary method of
22:38
compete about repeating in the business
22:39
world
22:40
so you Hellmuth everybody getting
22:41
rebates so the whole rebate thing is is
22:43
really a big red herring probably I mean
22:45
budget Roy’s not a far aside from that I
22:49
rohnke thought finally develop his own
22:50
pipeline for of course you don’t really
22:52
where roads at all and so far from some
22:56
billing is his whole empire up on
22:58
rebates violated by the late 1870s he’s
23:01
really shifting to the pipes to building
23:03
pipelines and rather than using
23:06
railroads at all he tries a monopoly a
23:13
cartel con Reitman with a South
23:15
improvement company 1871 which was a
23:18
raheem price all the various railroad
23:19
the various oil company or refineries
23:22
get together and they make an agreement
23:24
that they were get they were band
23:25
together in this cartel arrangement and
23:26
they were allocate quotas of shipments
23:28
between arrows each railroad is no sign
23:30
of buying folders of oil and
23:32
Pennsylvania railroads get 45% of the
23:35
Erie Railroad twenty seven and a half
23:36
percent mostly and maturity or
23:39
refinement suppose gets larger rebates
23:42
and allocate their shipments and what
23:46
happens in that is what happens to that
23:48
what happens the sound improvement
23:49
company cartel as it was so what happens
23:51
in virtually every cartel in history of
23:52
the world I was a very sweeping
23:53
statement I’m willing to go out on a
23:55
limb and say and virtually every cartel
23:57
in history in the world that collapses
23:59
very very quickly unless the government
24:00
steps in and supports so the reason why
24:04
cartels tend to collapse and we’ll see
24:06
this time and time again on one with a
24:08
litany of collapse well the two basic
24:12
reasons one of internally
24:14
external companies get together decide
24:16
but first of all the usual model for
24:19
cartel though as a usual model is the
24:22
average person thinks of people getting
24:23
together and raising prices almost
24:24
automatically say yeah twelve steel
24:28
companies once playing you all get
24:29
together Union League clubs them martini
24:31
they say hey Jim how about raising the
24:33
price pepper sign great bring it on yeah
24:35
let’s do it
24:36
this is the this is the usual sort of
24:38
layman’s view of Adam Smith one says
24:41
businessmen always trying to conspire to
24:44
raise prices well the play is it’s not
24:46
that they wouldn’t like to do that they
24:48
all like to have higher prices however
24:50
there’s one big catch and one reason why
24:52
can’t be done over the Union over
24:53
martini the Union League club the reason
24:56
is in order to raise no businessman I
25:05
like the cut production everybody
25:06
everybody’s name I think freeze
25:07
production I can expand that’s right
25:09
so the idea of cutting production like a
25:11
moment of throat with any
25:12
self-respecting business and then aside
25:14
from once even excuse even if you accept
25:16
the idea in principle yeah that’s it man
25:18
are really hammer it out how much it
25:20
gonna cut what and this is this is a
25:23
sort of negotiate there there you need
25:24
very lengthy negotiations and never
25:26
really gets resolved sounds macro
25:29
usually of course the cut on the basis
25:32
of you know historic production so on so
25:36
the steel industry let’s they got
25:37
together a cartel and I won’t say 1973
25:39
us deal has another the market and don’t
25:42
go my place percent over let’s let’s do
25:45
it on that faces each each diet each
25:47
producer will cut his production like
25:49
they might ten percent well he can see
25:52
do you think that was fairly simple
25:53
however a lot of problems of that and
25:55
one thing there’s always changes in
25:56
business one company might be so many
25:59
coming up on the new processors could
26:00
expand its production hopefully they’d
26:02
share the market my a lot next year so
26:04
it doesn’t want to cut back then want
26:06
cripple them solid here we here I’m
26:07
gonna have a great new process coming
26:08
out I got football America they’re going
26:10
to car share the market my temper saying
26:12
we could probably explain it another 20
26:14
so you have will need only fantastic
26:17
tensions are here for the Morse is
26:18
caught in your contradiction any attempt
26:20
at having a cartel kind of range so what
26:24
almost always happens in the cart
26:26
if they finally do get together and
26:28
agree on cutting production you cut
26:30
production here you ship this you know
26:32
I’ll take that market somewhat so on as
26:34
two things happen one is at the okay
26:38
earn themselves
26:39
individual firms they look at the
26:40
situation it will have higher profits
26:42
presume they raise their prices and they
26:45
look at the thing in they would really
26:46
cut production I say and agree to cut
26:47
sales but then in the dead of night they
26:49
go I’m secretly you go to Jim your big
26:55
buyer you say look I have an agreement
26:57
of the price of widgets gonna be $10 a
26:59
box however for uses you’re a great guy
27:01
and I’m follows Rotarian a good customer
27:04
and I make it eight dollars a
27:06
male-to-female tell anybody so then of
27:09
course Jim was the thing you know
27:10
trouble those purchases and first a few
27:14
months of the things you know of the
27:16
word leaks app secrets are kept very
27:18
long anyway
27:19
then the competitor finds out that this
27:22
guy’s secretly cover March he denounces
27:23
them bit early for chiseling scavenger
27:25
believe the corporate analog for
27:29
scamming he is he says look at him I
27:31
will cut look at age 50 and so on and so
27:33
on and everybody else follows at the end
27:35
of the cartel this is the this is the
27:37
internal pressure a frank Accord talk
27:38
the external pressure is another other
27:41
guys look around
27:42
hey the widget industry just so you know
27:45
I had a cartel in there well the outside
27:52
pressure is the other guys from Canada
27:54
are from from or new new entrepreneurs
27:56
or Pfizer Phoebe’s liepman independent
27:58
the capitalist but so I was producing
28:01
widget plant in unless bonanza
28:04
all right so they produced they get on
28:07
the widget bonanza and what are the
28:08
existing would you companies gonna do
28:09
they’re they’re up a creek so to speak
28:11
because the guy that can only do two
28:14
things either they fix believe the new
28:16
the new guys will undercut the cartel
28:18
and you had it again on telephones or
28:20
you say well let’s break let’s let these
28:22
guys in on the quota well then you have
28:24
to make a new quota if I carve out a new
28:25
quota for me this new widget company
28:27
which means very only listening for have
28:29
to take another big cut in their
28:30
production this is a yellow five happy
28:33
and even if they do it some new guy will
28:36
come in a second who’s not coming the
28:37
whole thing goes bust so what happens is
28:39
the former Cardinal inevitably put a
28:44
combination of internal pressure on
28:46
external parties coming in and old
28:49
companies secretly cutting prices we
28:51
think collapses the only collapse and
28:53
collapses unless the government steps
28:55
that prevents it from happening keeps
28:56
other companies out or you know keeps
28:59
keeps prices we mean cut of course
29:01
that’s no longer the railroad caper now
29:03
does it really season okay I want to
29:06
focus on but in case of the railroads
29:10
coke all points out if I was in
29:11
regulation and so from this point these
29:16
are more maybe Morgan other people
29:19
trying to desperately keep forming pool
29:20
after pool cartel has a cartel in
29:23
eighteen seventies and early eighties
29:25
and they always say wait wait we’re
29:26
gonna raise our white race when I cut
29:28
shipping allocates shipments so when
29:29
someone and do it and it’s a few months
29:31
or so some other railroad comes in as a
29:33
secret rebate secret rebates and the
29:36
whole thing collapses so then you have
29:38
to turn to the state apparatus to
29:39
enforce it the case of the railroads you
29:41
had one of the first things the ICC did
29:44
of course and they are attacking
29:45
monopolies note what the hell or secret
29:47
rebate the purpose of out to sea you can
29:50
tell the public secret rebates are evil
29:52
frame of their monopolizing that sounds
29:54
bad secret the first place
29:56
I think secret sound of Ebola the policy
29:59
to the public on that basis and what
30:00
you’re doing the LLC can relay because
30:02
your outgoing the major method by which
30:03
a cartel is broken and we internally
30:07
[Music]
30:09
this is why I fortunately Bismarck
30:11
period and later in Germany man cartel
30:13
coming in a big way the German
30:15
government’s enforcing it though help if
30:16
you have to even if your steel company
30:18
in Germany you have to join the cartel
30:20
yeah except the cartel decisions are
30:22
enforceable by the government about the
30:24
courts and the police and if you violate
30:25
any decisions your trouble uh the case
30:30
of the South improvement company did not
30:32
have the government apparatus behind
30:33
them until the same complete collapse
30:38
the other big charge
30:41
about not only rockefeller with many
30:43
other company can that figure it I
30:44
mentioned this in this bibliography I
30:46
don’t go into revealing detail the
30:49
lectures is the way Rockefeller achieve
30:52
his ends has knobbly status but many
30:55
other corporations achieving earthly
30:56
status is true but sometimes predatory
30:58
price and cutting list yet doesn’t
31:01
inelia any of you for some thought you
31:03
know undergraduates somehow
31:06
undergraduate population of America’s
31:08
absorbed this mythology
31:09
I got it from anyway the ideas well I am
31:12
PE over the way they got big because
31:15
they undercut that course they literally
31:18
took losses they were bigger than the
31:19
other guys it took losses they drill the
31:21
other guys out of business and they
31:23
raise prices famous famous model me you
31:25
lower your prices you take courses in
31:27
the you then you drive the other guys at
31:28
you there’s somebody raised prices on
31:30
yeah I don’t think there’s one
31:31
authentication apparently maybe there is
31:34
man I don’t know that those economists
31:38
have studied us in some detail and found
31:41
out that the cases are all the mythology
31:42
to all McGee done a course of classic
31:44
article on Samuel Samuel New Jersey and
31:47
alleged predatory price cutting there
31:49
and which are deserving to the sugar
31:51
when I can Sugar Refining Company
31:53
cannula powder I’m kind of first
31:56
demonstrating has never happened there’s
32:00
good arguments in economic theory why
32:01
shouldn’t happen one thing it’s a rage
32:04
Rick if somebody risky because the first
32:05
place the big company not necessarily
32:07
more compelling than a small company and
32:08
I mentioned last night another pushcart
32:10
poplar if the if a and P try this with a
32:13
cover I don’t know secondly uh a large
32:19
company is taking heavier losses and
32:25
they don’t know when this thing is gonna
32:26
end there’s another problem I was posing
32:28
a war gonna go on certainly
32:32
supposing they drive the elegant America
32:34
but we have a lot of bankrupt oil
32:36
refineries around what happens somebody
32:41
buy them at auction in our bankruptcy
32:42
fixing my first storm and then waits for
32:45
sound or let’s say the alleged
32:46
hypothetical Standard Oil case where you
32:47
raise your finally at last
32:49
the ratio your race your prices after
32:53
absorbing these losses from in a year
32:54
and all of a sudden you see this pest
32:56
from around the corner living in and
32:58
undercutting him but he has he and he
32:59
started off and almost no data we lost
33:01
he’s bought this refinery for nothing
33:03
so it’s extremely risky risky kind of
33:07
that procedures other type also one of
33:14
the peculiar thing is nobody seems to
33:16
worry about everybody’s worried about
33:17
the beginning of process if you’re
33:18
really interested in welfare of a
33:20
consumer as a consumer you as consumers
33:22
we should be very happy about this as
33:24
long as the price was going on but we
33:26
should be saying is hey it’s terrific
33:27
giving you a royal election and selling
33:30
it for you know penny a gallon or
33:31
something great terrific
33:32
then wait until they drive everybody out
33:34
and we raise the pie then they finally
33:35
get there so for monopoly price then we
33:37
can belly it it does have some belly
33:39
aching now interesting enough the final
33:41
the final monopoly price never seems to
33:43
arrive on the situation one of the one
33:46
of the things that you’re musing me is
33:47
like the clipping and I got came across
33:49
the New York Times about the nineteen
33:51
fifties the German steel industry on
33:54
thicker German business and gentlemen
33:56
was petitioning a West German government
33:57
to resume jung-ho sweetheart calm they
34:00
brought back to World War two and he was
34:03
the argument that you get the
34:04
interesting needs to get into the
34:04
argument it said if you know I wish I
34:07
was playing with me they said in effect
34:09
if you don’t impose cartels
34:11
now what you’re gonna have this big
34:14
business is gonna gonna drive out the
34:16
small business out of existence they’re
34:18
gonna raise fight so therefore the
34:21
argument the argument that is we should
34:23
have posed an inefficient compulsory
34:25
cartel now to keep these an efficient
34:26
from any firms and business and raise
34:28
prices in strict reduction a because
34:29
otherwise you know do that you have an
34:31
efficient monopoly somehow in the future
34:32
which might raise problems and the
34:35
interesting thing is they can’t even get
34:37
away with us why are you spent so so the
34:43
state has been having many studies of
34:45
this what apparently happened with the
34:47
way in which Rockefeller on the sugar
34:48
trust some prior offenses said the way
34:51
they trying to establish a monopoly is
34:53
not by driving like kind of taking more
34:54
so than comes on if is immoral
34:57
headaches specifically by buying them up
34:59
by my merchants I mean make it rain you
35:02
buy them up you try to you try to have
35:05
an efficient you know efficient to use a
35:06
large steel suppose the very large-scale
35:08
production which is essentially what
35:13
rock phone one of the things that happen
35:14
I mean the anticipating roofing yeah but
35:17
one of the things that happened then was
35:19
that uh well Ennis where the sort of
35:21
things occurs when Rockefeller tries to
35:22
buy up all refineries or the sugar
35:25
glucose company when it is viable or
35:27
glucose what you have then is there’s
35:30
something something like farm price
35:31
supports the government says we stand
35:33
ready to buy all soy beans at X dollars
35:35
of mission way above the market price
35:37
amis you you start developing a new
35:39
industry in the world industry is
35:41
building plans to sell a rocket ball
35:42
filling a finally some other funds of
35:44
maya or building sugar plants on the
35:47
sugar guys come we’ll have to burn it in
35:49
other words if the government isn’t or
35:51
simply keeping the neutrons out but you
35:52
have a new guy three her own interpreter
35:54
saying okay choke on this the ability
35:59
finery is to see a forcing the vine
36:00
finally which is which is sort of a
36:09
natural result of this whole process
36:11
unless as I say the government steps in
36:12
prevents that from bully nucleus of the
36:14
Wynwood well Standard Oil I say haven’t
36:21
had natural advantages they had they had
36:25
this location in Cleveland they had I
36:28
had first one to really believe you
36:30
moving on our scale marketing
36:33
well they the first like the book
36:34
stations they’re more efficient as
36:39
management competition they were not by
36:44
the by the 1880s at ninety percent of
36:47
the u.s. oil refining oh no that’s you
36:50
can’t get much you know much higher and
36:54
by than eighty ninety nine we have the
36:57
new Stan Laurel New Jersey there’s a
37:00
holding company for the various here
37:02
state so by the by the yard eighteen in
37:09
our 1889
37:11
they have proximately to be some percent
37:13
above finding 86% of the marketing they
37:15
never had much more than a third of the
37:16
crude oil my wife whereas brew dogs will
37:18
have an extremely competitive and a
37:19
sense of many many producers so what
37:23
happens to them hey what happens to them
37:25
as well I’m more about the efficiencies
37:29
than well first one of the things which
37:32
standard or pioneered in Rockefeller
37:34
point even in the days when there’s
37:35
throw panel of Ohio was they were the
37:38
first guys to reduce freight cost my
37:41
having large coral oh I haven’t rainbow
37:44
lost by having a regular study flow of
37:46
traffic to fix the math for a day
37:49
hanging low etc they they first got to
37:54
really carry their own fire insurance
37:56
provider internal criminal facilities
38:08
and there was the first class of
38:10
koharu-san oil come up with important
38:12
technological innovations in the oil
38:13
refining business but Burton cracking
38:15
process but fresh process applied the
38:17
oil and some points on the byproducts
38:19
improving lubricants distributing of the
38:22
mention before and so forth the one of
38:30
the things I guess which should be on
38:31
there’s quite a cute thing I guess I
38:32
should mention a hold bet which Alan
38:35
Evans explosive I wanted to quote some
38:36
of the great myths in the apartment
38:40
power this is a buffalo explosion this
38:43
is the this is the thing where
38:45
Rockefeller supposed to set up set
38:47
people agents and blow up a competing
38:55
and theory wasn’t that the Standard Oil
39:01
people had induced employee to pack a
39:04
safety valve a plaster and thereby my
39:07
cause of the blow-up first place the
39:12
nothing was blown up did you think
39:14
things about this this is the search
39:16
story looks like nothing
39:17
blown up because we plastered broke so
39:20
there nothing you know explosion
39:23
and one of the one of the one of the
39:25
stories here would be the owner of us
39:27
independent before loop copying supposed
39:28
to be a heroic chapping Charles Matthews
39:31
the actual situation was several fingers
39:33
nevertheless sort of like a litany here
39:35
attacking every facet of this myth one
39:39
one safety valves are always we usually
39:41
because as a safety measure prevent gas
39:45
leakage so locally thing you know
39:46
knowing usually about packing them out
39:48
to is supposed to break on the valve
39:51
will open wasn’t so broke by accident
39:55
safety valve on very often broke three
39:58
that Matthews and associates were former
40:02
to Sparkle employees back in World Cup
40:04
names City area of standard who were
40:07
engaging also to be legal activities and
40:12
finally they they they build that plant
40:17
purely for the purpose of selling at the
40:19
sound well for this so every one of
40:27
these everyone finally the guy who’s
40:29
supposed to done this mister watch Bowl
40:30
that’s one of my associates knew nothing
40:33
of any of the stuff at all every facet
40:36
of this method incorrect historian’s
40:43
there’s a similar myth about JP Morgan
40:45
getting his first I needs first dollar
40:48
by selling defective home beautifully
40:51
exploding I’ll go ahead and Watson
40:56
showing every facet of this myth not
40:58
only is every facet of this thing wrong
40:59
I don’t mean what they always weren’t
41:01
defective and so when someone GT Morgan
41:03
nothing to do with it but awesome that
41:05
every historian is the easiest I
41:07
repeated the story he capped
41:08
embellishing it not only copied from the
41:11
previous dominant also the more stop
41:12
against Morgan the woman this is what’s
41:14
wrong that’s right
41:17
[Laughter]
41:24
Rockefeller is only another important
41:27
paper political political front rocket
41:31
are in for the very beginning for almost
41:34
the very beginning and continuing on to
41:36
the present day really she’s nothing
41:37
importance of this has always been
41:39
associated not only with little family
41:40
many members of the family but also a
41:42
whole bunch of other family family
41:44
association both in investment and I
41:46
think wasn’t in politics so we have a
41:48
combination the ratified Germany
41:50
Rockefeller family his brother William
41:51
Rockefeller and his descendants the
41:53
hardness family the Flagler family pain
41:55
and Whitney comes into the study of the
41:58
pain the bust wakes the Pratt’s the
42:01
Brewster’s the Rogers of the arch bowls
42:03
these names are keep popping up from
42:05
then on just one that I can’t resist at
42:11
this point and we completely out of
42:13
alignment here I can’t resist us that I
42:15
might not get to it later on about rock
42:17
falling track during the Eisenhower
42:19
administration the Secretary of State
42:22
President John Foster Dulles and I think
42:24
fast mention this mine who’s that who’s
42:26
a partner someone excels on a crime
42:28
while I was a courses it witnessed and
42:30
the world actually but not only that
42:34
that was something which is not only
42:36
known to certain genealogists students
42:38
of genealogy in wanted world vas is
42:41
married to Jake Jenna Pomeroy Avery you
42:43
happen to be the first cousin of Johnny
42:44
Rockefeller jr. which makes the LS a
42:47
kinsman remember Rockefeller family
42:49
important sentences and then we had
42:51
Allen W Dulles his brother was a head of
42:53
the CIA also some importance of foreign
42:55
policymaking
42:56
then we had his sister Eleanor Lansing
42:58
Dulles bigshot mistake that the Asia
43:00
desk of a State Department and then we
43:04
had I know Secretary of State was a
43:06
beloved thinker from from Boston HR
43:09
efficient hooker and push it heard it
43:13
was dynamic charismatic follow a little
43:15
emphasis but today I mean an even more
43:18
charismatic but Christian heard of this
43:20
again was not really highlighted in the
43:22
press of the time I was married or flat
43:23
like another we remember the Pratt
43:25
family
43:25
fits into the Rockefeller practice
43:27
historicity
43:30
the Eisenhower administration I want to
43:34
emphasize the fact these people at the
43:35
rocket are and our associates continue
43:37
on and sort of both on economics and
43:42
politics but what happens to the oil
43:48
monopoly than 90% happens to it as it
43:56
begins to crack cracks before the
43:57
dissolution before the antitrust action
43:59
the 90% by 1911 90% against the collapse
44:05
about 60 65 percent which is
44:06
considerable slippage
44:09
I want two more figures here in 1899
44:18
family won’t have money I need for some
44:20
of the refining the United States or
44:22
refining 1904 so seven without 84
44:26
percent by 1911 of an 18 19 21 out of 50
44:29
the number of refiners increases from
44:32
remember refiners oil fires increases
44:33
from 67 in 1899 147 1921 what happens
44:39
those new competitors come on first
44:40
place fan of the oil doesn’t have a sum
44:42
many big businesses many many big
44:43
business become overly big overly
44:45
bureaucratic you’re talking this morning
44:46
about bureaucracy in the Palmer but what
44:48
happens as I mentioned a little bit
44:49
under oxen a Polaroid what happens if
44:52
the situation is fluid enough and market
44:53
free enough new firms pop up or take
44:56
advantage of the mistakes of the old
44:57
firm your are bureaucratic bureaucratic
45:01
aggressiveness the old front but Hannah
45:04
this would be span well begins to fall
45:06
behind on the oil revolution because
45:07
there were several oil revolutions one
45:09
was the fact that the major production
45:11
of oil against a shift for for some
45:13
kerosene the gasoline as for to reason
45:15
obviously I’m a trustee begins to come
45:16
up to replace kerosene lamps and
45:20
secondly because the automobile but gets
45:21
to come up and gasoline becomes
45:23
increasingly important they’re saying
45:25
will forms behind them and the shift
45:27
having emphasized kerosene all over the
45:29
distance that the against one young he’d
45:32
be slower than his competitors and then
45:33
realizing what’s going on swinging with
45:35
a new secondly as new I know of course
45:40
it always been concentrate on the
45:42
Western power
45:42
Vania and Eastern Iowa fields and we
45:45
begin to find after 1900 1900 1920
45:49
approximately we going to find new or
45:50
feels the fixes and we go California
45:53
California and the continent oil field
45:55
all these workers begin to be discovered
45:56
Pamela Layton and me life might be
45:59
taking advantage of it and late and
46:00
young and getting getting crude oil in
46:03
there getting in finally so and for
46:09
never 1899 63% of the oil refined
46:12
kerosene in 1919 only 15% was character
46:15
its big ship against me and the
46:17
independence new independence coming up
46:20
like like the type of tie world and
46:22
company Gulf oil company which of course
46:24
this actually melon
46:26
no one family is high were associated a
46:28
a much more alive or this whole new this
46:31
whole new shift and then you cannot make
46:34
a technological theta also even though
46:38
standard waha
46:38
had led the field in the old days in the
46:40
1980s and 90s in both stations things
46:43
like that the independence lead senator
46:46
well I think my gasoline special the
46:47
idea of a filling station for gasoline
46:49
is a brand new thing I think of it first
46:51
it’s one of these things somebody
46:52
mentioned today I think that you have to
46:55
see me when somebody shows you the way
46:58
you think of a gas station after
47:00
somebody else’s thought about the effect
47:02
but the independence leads Standard Oil
47:04
and evolving an idea in the gasoline
47:06
it’s like fish they also lead the idea
47:09
of a petrochemicals later on a whole
47:11
petrochemical industry essentially was
47:12
failing was way behind in that and the
47:15
idea of tank cars and that whole
47:17
business again it’s essentially led by
47:20
the independence
47:24
that’s another yeah another big not
47:27
biology beginning to America alleged
47:29
hopeful monopoly US Steel I’ll get to in
47:32
a second another Morgan company
47:36
established 1901 is supposed to not
47:39
blame foreign steel business fantastic
47:42
retro rest of the last firm of the role
47:43
of the basic oxygen prostate install the
47:45
base a oxygen processors the biggest
47:47
thing
47:48
early nineteen hundred’s and the steel
47:51
business for one reason is because first
47:53
they have let me say have lousy
47:54
bureaucratic management and other reason
47:56
they have all is investment in previous
47:57
processes they felt they were stuck with
47:59
the first firms have been gonna develop
48:02
the basic oxygen process in the 30s is
48:03
small german companies and then the
48:06
small american companies are going to
48:07
adopt them us deal the last of swing
48:09
with a new dispensation and therefore
48:11
the share of the market has been
48:12
slipping a long long time okay they
48:16
wanted to deal but the we have again a
48:21
sort of horatio alger thing with with
48:22
Carnegie and Frick was working on
48:27
superior coke and Kearney working
48:29
superior steel I got together and they
48:31
have an integrated kind of company we
48:35
first want to think of leasing iron ore
48:37
from Minnesota and having it world
48:39
carrier fleet Mariano generally
48:41
integrate and they develop the quantity
48:47
steel company check something like 25 to
48:49
30 percent of total steel production
48:50
than 1890s now we come to the Morgan ER
48:55
has his associate or agent whatever we
48:57
want to call judge Albert H Gary who
49:00
involved the u.s. steel company is a
49:02
merger a whole bunch of steel companies
49:04
including federal steel in 1901 which
49:10
developed at a series of mammoth mergers
49:12
again again the idea as also doing the
49:15
bri-bri neglected he cannot make a story
49:18
in this period
49:20
pointing out what happened is these I
49:22
got carried away they realized was a
49:23
great efficiencies with large-scale
49:24
production launch distribution they saw
49:26
that happening in mines a big business
49:28
therefore they felt you know biggest
49:30
good and bigger must be better and
49:31
biggest must be spoke better and they
49:33
didn’t realize there was this economy’s
49:35
in large-scale production you get larger
49:36
and larger and larger you know something
49:37
is going to crack either gonna you’re
49:39
not gonna even become bureaucratic you
49:41
have too much management Deadwood enough
49:44
internal market or whatever and so the
49:47
bait you can understand why they want to
49:48
develop a merger and a monopoly set up
49:50
and probably the whole thing together
49:53
come back I don’t steal oil but almost
49:58
every other industry to boot
50:01
during the 1880s and 1890s or
50:05
approximately over 700 iron and steel
50:07
companies the United States there are
50:08
numerous attempts at pulav and caught
50:10
taller than the old flopped and finally
50:12
there’s a series of mammoth mergers they
50:14
figure if I can’t caught alive then we
50:15
can just merge which seems to be simpler
50:17
more more permanent it’s another
50:19
interesting point I think made by
50:20
Weinstein or some other if a
50:24
conspiratorial story but the one of the
50:26
effects of the Sherman Antitrust Act the
50:28
album of the outlaw cartels a voluntary
50:30
cartels one of the things you do is you
50:31
stimulate mergers the merger is not
50:34
really he’s not a cartel rock I suppose
50:35
he simply merged so you have an
50:37
overstimulation of mergers a so-called
50:39
high monopoly war really leads to a you
50:42
know power a lot of mergers and Trust
50:44
and this might have been I don’t know
50:46
because I’m very few people really
50:47
studying about trust Louis Sherman
50:49
so for the origins of it but I have a
50:51
deep dark hunch this might have been
50:53
intended effect stimulate encourage
50:59
mergers so against cartel anyway he had
51:02
a series of mammoth mergers they wind up
51:04
in the u.s. steel yet I mean if there
51:09
was a murderer proximately how do the 38
51:11
companies starting off for controlling
51:13
sixty percent of the oil steel mark okay
51:17
a key figure key figures are too great
51:20
Morgan persons of that period judge Gary
51:23
I mentioned George W Perkins will pop up
51:25
more and more money lectures another
51:28
partner of JP Morgan and company so what
51:32
happens the USD was olive oil is this
51:34
great merger our first place us do the
51:38
price of you must deal shares in 1901
51:40
was fifty five dollars a share by 1904
51:42
$39 the profits dropped precipitously
51:46
separately 1902 profits are 16% on
51:50
investment 1904 without eight percent
51:54
not too hot experimenting we’re too long
51:57
now one of the things that happened one
51:59
of the reasons one of the things that
52:01
happens is it interesting thing here
52:02
about this whole merger cartel problem
52:04
see if you have a big merger you can
52:08
either raise you can get here monopoly
52:09
twice by cutting production dropping a
52:11
lot of plants and raising prices but
52:13
then you have to worry about new
52:13
competitors
52:15
we can keep the price low which is what
52:16
us a little bit we can have the price
52:19
Lola so not to attract new competitors
52:20
then you don’t have any more properties
52:25
your court again in the inter
52:27
contradiction the courts home
52:28
– merger so they have to keep it up
52:31
price gloss over they figure they have
52:32
to have some way of Carta lysing and we
52:34
come to the famous gallery dinners
52:35
I think Southern 19:8 Judge Gary
52:41
banquets
52:43
try to get an agreement to raise prices
52:46
and cut production so what happens to
52:50
the 90 no son here’s Judge Gary van will
52:51
must press the e for the u.s. steel
52:53
company with 60% of the market so JP
52:55
morgan’s great power behind them and
52:57
what happens to the Gary dinner like a
52:58
total bomb out and by 1908 he’s only a
53:02
year or so after the canary dinners
53:03
secret price cut Gossett senior price
53:07
coming especially by the smaller
53:08
competitors right there under the table
53:11
Leslie’s finally open price coming on
53:13
the guys find out about of the whole
53:14
thing cracks the whole Gary there is
53:15
collapsed and the end of eating for Gary
53:18
sometimes I’m only in World War one
53:24
it smells on a rusty point 340 big steel
53:27
analyst administration it’s only over
53:29
glorious glorious culmination of
53:31
progressive ideal and which is world war
53:34
one that Judge Gary finally finds its
53:37
mission like so what happens do USD all
53:43
have a continuing it’s really like you
53:45
know just this triumphing social don’t
53:46
one of them at work you must be on a
53:50
steady decline in the share of the
53:51
market from then on Mike you know want
53:53
to have 63 percent of Ming notes and
53:54
castings for example 1911 the 15 van 52
53:58
percent nineteen twenties and Mike at
54:00
forty six four seven nineteen fifties
54:01
run 32 percent less than Cosmo – would
54:05
really call me company and again we’re
54:12
technically extremely conservative of
54:14
bureaucratic not only are they the last
54:17
guys to adopt the basic oxygen system
54:19
which is fairly recent also almost the
54:20
last time the shift from the Bessemer
54:21
process for the open hearth the process
54:23
which the big shift occurred during the
54:25
first two decades of the
54:27
20th century us do have enormous
54:30
investment investment equipment that’s
54:31
from our plants and was very difficult
54:33
for them to the ship so they other
54:36
independent to pop up you know we’re not
54:39
Bessemer not heavily committed the
54:40
Bessemer ISM and the knob the open
54:42
hearth method also for USD was race slow
54:45
to enter the growing feel of wider steel
54:47
product they were committed I think this
54:48
goes along with Bessemer there were no
54:51
committed a heavy steel so they weren’t
54:53
swinging where they weren’t adapt of the
54:55
army of lighter steel rods of sheet
54:56
steel strip steel and then was one of
54:59
the last to adopt the having to scrap
55:01
young scrap recycling scrap one of the
55:05
last without stainless steel and alloys
55:07
or the last of that the continuous
55:09
rolling mill one of the last they
55:11
refused to buy a structural steel for
55:13
example will never work and so time it
55:18
again an area after area was the old
55:20
clubs the duck I think it’s directly
55:21
related in there for then the genesis us
55:25
the onus basic nature they were locked
55:28
into heavy steel obsolete equipment
55:29
obsolete process monopolies kind of
55:32
mentality there’s next one article
55:37
journal log which I forgot the foot to
55:40
mention bibliography mile over Adams on
55:42
USD in the quarterly journal economics
55:44
event ten years ago or so on us deals
55:47
failure they’re not the oxygen basic
55:48
oxygen process so that’s the year that’s
55:54
the steel capers give you a cocoa says
55:56
I’m time for conservatism quote anything
56:00
for your clothes I meant something
56:03
that’s not called the steel industry was
56:04
competitive before the world war and the
56:06
efforts of a massive Morgan
56:08
established control and stability over
56:10
the steel industry my voluntary private
56:11
economic means had failed having failed
56:14
in the realm of economics the efforts of
56:17
the US Steel Group were to be shifted
56:19
the politics I think it’s a beautiful I
56:21
think not only for steel for the whole
56:23
normal wax having feel in the realm of
56:25
economics they shift their efforts shift
56:27
the politics there’s only it’s kind of a
56:29
cute thing about cocoa this is an aside
56:31
i i’ve been very influenced by the cocoa
56:35
view the progressive era and many other
56:37
libertarian conserve
56:38
butcher philosophers and we’ve been
56:43
pushing a lot of cocoa stuffing in our
56:45
literally cocoa expose it up this up the
56:48
wall I mean guy exactly a very
56:49
swinging typing again with not exactly
56:52
does know about him yet he keeps being
56:56
bombarded big be real cocoa but limit
57:00
area to put your literature as
57:01
completely idea is completing hopped up
57:03
about it
57:04
he’s running letter saying I’m don’t
57:05
believe in the free market

Murray N. Rothbard Quotes

Oppenheimer, The State, p. 15: "What, then, is the State as a sociological concept? The State, completely in its genesis . . . is a social institution, forced by a victorious group of men on a defeated group, with the sole purpose of regulating the dominion of the victorious group of men on a defeated group, and securing itself against revolt from within and attacks from abroad. Teleologically, this dominion had no other purpose than the economic exploitation of the vanquished by the victors."Murray Rothbardhttp://www.readrothbard.com/quotes… (next quote)